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How Israel’s war on Gaza is bleeding Egypt’s economy – Al Jazeera English

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Already facing a deep crisis, Egypt’s economy appears poised to take a hit from Israel’s war on Gaza and the spiralling tensions in the Red Sea, analysts have said.

Currently on “life support”, Egypt’s deteriorating economy suffers from growing public debt now at more than 90 percent of its gross domestic product (GDP), capital flight and the currency’s fall against the US dollar.

Now, those challenges are being compounded by the war, as it edges closer and closer to Egypt’s border, with a large chunk of Gaza’s population pushed into Rafah, after four months of displacement as a result of Israel’s relentless attacks. Tourism and the Suez Canal are two of Egypt’s major sources of foreign exchange.

Bleak outlook for tourism

Egypt’s pyramids, museums, resorts and monuments attract visitors from all over the world and have long made tourism a major source of national income. In 2022, roughly three million Egyptians worked in the tourism industry.

Before Israel’s war on Gaza erupted, Egypt’s tourism sector was already struggling to recover from COVID-19. But it appeared to be rebounding. The Gaza war and the Red Sea crisis could batter revenue prospects from this industry. According to S&P Global Ratings, Egypt’s tourism revenues are set to experience a 10-30 percent fall from last year, which could cost the country 4-11 percent of its foreign exchange reserves and shrink GDP.

“The conflict’s proximity to the Sinai peninsula has led to a sharp decline in tourism, which brought in…$13.63bn in revenue during the 2022-23 fiscal year,” Amr Salah Mohamed​, an adjunct lecturer at George Mason University, told Al Jazeera.

“Although the full extent of the damage to Egyptian tourism from the ongoing conflict is difficult to quantify so far, early indications, such as a 25 percent drop in early November bookings, suggest a substantial downturn that is likely to continue if the conflict persists,” he added.

Drop in Suez Canal revenue

Since November, Egypt has been grappling with the economic impact of Houthi missile and drone attacks against Israel-linked commercial vessels in the Red Sea, which has been the Houthis’ response to Israel’s war on Gaza.

A consequence of these strikes along the shortest trade route linking Asia to Europe through the Suez Canal has been many shipping companies rerouting their vessels around the Cape of Good Hope.

In the 2022-23 fiscal year, the Suez Canal brought in $9.4bn of revenue for Egypt. In the first 11 days of this year, revenue from the Suez Canal plummeted by 40 percent compared with the same period in the previous year.

That damage has only increased since then. Egyptian authorities said revenue in January from the Suez Canal had fallen 50 percent since the start of the year, compared with the same period in 2023.

Gas sector problems

Since October 7, Egypt’s gas economy has also suffered greatly. Two days after the Hamas-led incursion into southern Israel, the Israeli defence establishment ordered the temporary halting of extractions from the Tamar gas field, located 25km (15 miles) from Israel’s southern coastal city of Ashdod.

Egypt is home to the Eastern Mediterranean’s only two gas liquefaction facilities. Israel exports its gas – including from Tamar – to Egypt, where it is turned into LNG and exported to other markets, in particular, Europe.

Because of the war, Egypt’s re-exports of gas fell by more than 50 percent in the fourth quarter of 2023 compared with that same period in 2022. This dynamic has highlighted Egypt’s economic dependence on Israel, which constitutes a huge vulnerability for Cairo at a time when tension is high in the region due to the Gaza war.

Potential influx of refugees

The fate of the 1.4 million Palestinians taking shelter in Rafah is also a source of unease in Egypt.

The government of President Abdel Fattah el-Sisi wants to prevent the influx of displaced Palestinians into the Sinai peninsula to escape Israel’s destruction across Gaza. There are already nine million refugees in Egypt, and Cairo has made clear it will not support any move that could amount to the permanent displacement of Palestinians from Gaza, which many experts fear is Israel’s game plan.

Security concerns over the presence of Palestinian fighters in Sinai, and the effects of their planned attacks against Israel on relations between Cairo and Tel Aviv, are a factor for Egypt. Economic challenges also help explain why Egypt views any forcible expulsion of Palestinians from Gaza into the Sinai as crossing a red line. Since Sudan’s conflict erupted 10 months ago, 450,000 Sudanese refugees have crossed Egypt’s southern border, which has already strained Egypt’s troubled economy.

Against this backdrop, Egypt has begun constructing a wall two miles west of the Egypt-Gaza border, potentially to forestall such a scenario. “There are those of us who fear that Israelis will destroy the existing Egyptian border fence so that they can push Gazans into Sinai,” said Patrick Theros, the former US ambassador to Qatar, in an interview with Al Jazeera.

“Egypt is building a second border wall lightly inside Egyptian territory to serve as a deterrent to the Israelis. Given Netanyahu’s desperate need to stay in power and avoid going to jail, the deterrent may not work,” he said, referring to Israeli Prime Minister Benjamin Netanyahu, whose popularity is at a record low domestically. Many analysts have argued that he needs the war to continue to avoid being removed from office. Netanyahu faces corruption cases.

“Washington’s irrational refusal to stop him may encourage Netanyahu to extend the fighting into Sinai, even if it ends the peace treaty with Egypt,” Theros said.

Managing expectations for economic reforms

Last month, US Treasury Secretary Janet Yellen met with the Egyptian Finance Minister Mohamed Maait in Washington to pledge US support for the Egyptian economy and reforms.

At the same time, there were discussions about augmenting Egypt’s $3bn loan with the International Monetary Fund (IMF) to help it cope with the war in Gaza and the Red Sea security crisis. The main elements of the economic reform package include the Egyptian government selling stakes in dozens of state-owned enterprises, subsidy reductions, moving towards a flexible exchange rate, and making the military’s role in the national economy more transparent.

Yet, analysts caution, the war in Gaza and the Red Sea security crisis coming in the aftermath of the geopolitical shocks caused by Russia’s invasion of Ukraine two years ago will probably make Egyptian officials more reluctant to implement some economic reforms.

In an interview with Al Jazeera, Ryan Bohl, a Middle East and North African analyst at the risk intelligence company RANE, said the IMF would need to be considerate of the multiple pressures facing Egyptian policymakers when making demands of them.

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Construction wraps on indoor supervised site for people who inhale drugs in Vancouver

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VANCOUVER – Supervised injection sites are saving the lives of drug users everyday, but the same support is not being offered to people who inhale illicit drugs, the head of the BC Centre for Excellence in HIV/AIDS says.

Dr. Julio Montaner said the construction of Vancouver’s first indoor supervised site for people who inhale drugs comes as the percentage of people who die from smoking drugs continues to climb.

The location in the Downtown Eastside at the Hope to Health Research and Innovation Centre was unveiled Wednesday after construction was complete, and Montaner said people could start using the specialized rooms in a matter of weeks after final approvals from the city and federal government.

“If we don’t create mechanisms for these individuals to be able to use safely and engage with the medical system, and generate points of entry into the medical system, we will never be able to solve the problem,” he said.

“Now, I’m not here to tell you that we will fix it tomorrow, but denying it or ignoring it, or throw it under the bus, or under the carpet is no way to fix it, so we need to take proactive action.”

Nearly two-thirds of overdose deaths in British Columbia in 2023 came after smoking illicit drugs, yet only 40 per cent of supervised consumption sites in the province offer a safe place to smoke, often outdoors, in a tent.

The centre has been running a supervised injection site for years which sees more than a thousand people monthly and last month resuscitated five people who were overdosing.

The new facilities offer indoor, individual, negative-pressure rooms that allow fresh air to circulate and can clear out smoke in 30 to 60 seconds while users are monitored by trained nurses.

Advocates calling for more supervised inhalation sites have previously said the rules for setting up sites are overly complicated at a time when the province is facing an overdose crisis.

More than 15,000 people have died of overdoses since the public health emergency was declared in B.C. in April 2016.

Kate Salters, a senior researcher at the centre, said they worked with mechanical and chemical engineers to make sure the site is up to code and abidies by the highest standard of occupational health and safety.

“This is just another tool in our tool box to make sure that we’re offering life-saving services to those who are using drugs,” she said.

Montaner acknowledged the process to get the site up and running took “an inordinate amount of time,” but said the centre worked hard to follow all regulations.

“We feel that doing this right, with appropriate scientific background, in a medically supervised environment, etc, etc, allows us to derive the data that ultimately will be sufficiently convincing for not just our leaders, but also the leaders across the country and across the world, to embrace the strategies that we are trying to develop.” he said.

Montaner said building the facility was possible thanks to a single $4-million donation from a longtime supporter.

Construction finished with less than a week before the launch of the next provincial election campaign and within a year of the next federal election.

Montaner said he is concerned about “some of the things that have been said publicly by some of the political leaders in the province and in the country.”

“We want to bring awareness to the people that this is a serious undertaking. This is a very massive investment, and we need to protect it for the benefit of people who are unfortunately drug dependent.” he said.

This report by The Canadian Press was first published Sept. 18, 2024.

The Canadian Press. All rights reserved.

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N.B. election: Parties’ answers on treaty rights, taxes, Indigenous participation

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FREDERICTON – The six chiefs of the Wolastoqey Nation in New Brunswick distributed a survey on Indigenous issues to political parties ahead of the provincial election, which is scheduled to kick off Thursday. Here are some of the answers from the Progressive Conservative, Liberal and Green parties.

Q: How does your party plan to demonstrate a renewed commitment to recognizing our joint treaty responsibilities and acknowledging that the lands and waters of this territory remain unceded?

Progressive Conservative: The party respectfully disagrees with the assertion that land title has been unceded. This is a legal question that has not been determined by the courts.

Liberal: When we form government, the first conversations the premier-designate will have is with First Nations leaders. We will publicly and explicitly acknowledge your treaty rights, and our joint responsibility as treaty people.

Green: The Green Party acknowledges that New Brunswick is situated on the unceded and unsurrendered territories of the Wolastoqiyik, Mi’kmaq and Peskotomuhkati peoples, covered by the Treaties of Peace and Friendship. Our party is committed to establishing true nation-to-nation relationships with First Nations, grounded in mutual respect and co-operation as the treaties intended.

Q: How does your party propose to approach the issue of provincial tax agreements with First Nations?

Progressive Conservative: The government of New Brunswick operates in a balanced and fair manner with all organizations, institutions and local governments that represent the citizens of this province, including First Nations. Therefore, we cannot offer tax agreements that do not demonstrate a benefit to all citizens.

Liberal: Recent discussions with First Nations chiefs shed light on the gaps that existed in the previous provincial tax agreements with First Nations. Our party is committed to negotiating and establishing new tax agreements with First Nations that address the local needs and priorities and ensure all parties have a fair deal.

Green: The Green Party is committed to fostering a respectful relationship with First Nations in New Brunswick and strongly opposes Premier Blaine Higgs’s decision to end tax-sharing agreements. We believe reinstating these agreements is crucial for supporting the economic development and job creation in First Nation communities.

Q: How will your party ensure more meaningful participation of Indigenous communities in provincial land use and resource management decision-making?

Progressive Conservative: The government of New Brunswick has invested significant resources in developing a robust duty to consult and engagement process. We are interested in fully involving First Nations in the development of natural resources, including natural gas development. We believe that the development of natural gas is better for the environment — because it allows for the shutdown of coal-fired power plants all over the globe — and it allows for a meaningful step along the path to reconciliation.

Liberal: Our party is focused on building strong relations with First Nations and their representatives based on mutual respect and a nation-to-nation relationship, with a shared understanding of treaty obligations and a recognition of your rights. This includes having First Nations at the table and engaged on all files, including land-use and resource management.

Green: We will develop a new Crown lands management framework with First Nations, focusing on shared management that respects the Peace and Friendship Treaties. We will enhance consultation by developing parameters for meaningful consultation with First Nations that will include a dispute resolution mechanism, so the courts become the last resort, not the default in the face of disagreements.

This report by The Canadian Press was first published Sept. 18, 2024.

The Canadian Press. All rights reserved.

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Canadian Coast Guard crew member lost at sea off Newfoundland

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ST. JOHN’S, N.L. – A crew member of a Canadian Coast Guard ship has been lost at sea off southern Newfoundland.

The agency said in a release Wednesday that an extensive search and rescue effort for the man was ended Tuesday evening.

He was reported missing on Monday morning when the CCGS Vincent Massey arrived in St. John’s, N.L.

The coast guard says there was an “immediate” search on the vessel for the crew member and when he wasn’t located the sea and air search began.

Wednesday’s announcement said the agency was “devastated to confirm” the crew member had been lost at sea, adding that decisions to end searches are “never taken lightly.”

The coast guard says the employee was last seen on board Sunday evening as the vessel sailed along the northeast coast of Newfoundland.

Spokeswoman Kariane Charron says no other details are being provided at this time and that the RCMP will be investigating the matter as a missing person case.

This report by The Canadian Press was first published Sept. 18, 2024.

The Canadian Press. All rights reserved.

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